Microeconomics Answers

Quantity demanded= 20000-3P

quantity supplied= 15000+2P

a. calculate the equilibrium price and quantity.

b. calculate the price elasticity of supply using the point method when the economy is in equilibrium.

What will happen to the equilibrium quantity and equilibrium price of renewable

energy resources if energy sector improves the technology?

Quantity demanded= 20000-3P

quantity supplied= 15000+2P

a. calculate the equilibrium price and quantity.

b. calculate the price elasticity of supply using the point method when the economy is in equilibrium.

In the year 2015, Maggie was banned in India for using more than permissible limits of harmful chemicals such as lead, MSG (Monosodium glutamate). After a few months the ban was lifted. However, this controversy made Indian consumers aware of harmful ingredients such as lead, MSG and their effects.a) What could be possible effects of this increasing awareness on the equilibrium quantity and price of Ching’s noodles with one of the ingredients as MSG? Explain with the help of a demand-supply graph.
B)One of the main ingredients used in Ching’s noodle is Maida (refined wheat flour). Suppose in the same year there was a very good harvest of wheat, so prices of wheat fell. How will it affect Ching’s noodle market (compare with part a)?

Q2. Suppose you are on a three-day trip to Rome (from Monday to Wednesday) and during your stay you decide to consume only Waffle and Ravioli (measured on the horizontal and vertical axes respectively). You have a given amount of money (some constant) to spend on each of the three days. Suppose that the price of Waffle rises between Monday and Tuesday. If your optimum points of consumption on Monday and Tuesday are respectively called M and T, such that M to the left of T, what does it say about both the commodities? Illustrate your answer using an appropriate diagram. [3 MARKS, Word limit: 200]

Sanjana loves to read books(B) and likes to watch movies(M) as well. She derives double the satisfaction from reading a book than watching a movie. Her utility function is as follows

U(B, M) = 2B + M

Where B and M are the number of books and movies respectively.

a. Explain the shape of the indifference curve using diagrams. [ Word limit: 200]

b. The income available with her is INR60. And price of movie ticket is INR 10 and that of a book is INR 15. Will she spend her entire budget and why? What will be her consumption, explain why?

Given P = 24-0.1Q, where Q = q1+q2 and q1 = q2, TC1 = 0.075q1^2, TC2 = 0.05q2^2, (i) Show the profit equation of each form. (ii) Determine the output and price of low cost firm. (iii) Calculate the profit of low cost firm. (iv) What profit maximizing price level the high cost firm would have charged had it been a leader?

The income available with her is INR60. And price of movie ticket is INR 10 and that of a book is INR 15. Will she spend her entire budget and why? What will be her consumption, explain why? 

Q1. Sanjana loves to read books(B) and likes to watch movies(M) as well. She derives double the satisfaction from reading a book than watching a movie. Her utility function is as follows U(B, M) = 2B + M Where B and M are the number of books and movies respectively. a. Explain the shape of the indifference curve using diagrams. [3 MARKS, Word limit: 200] b. The income available with her is INR60. And price of movie ticket is INR 10 and that of a book is INR 15. Will she spend her entire budget and why? What will be her consumption, explain why

Q1. Sanjana loves to read books(B) and likes to watch movies(M) as well. She derives double the satisfaction from reading a book than watching a movie. Her utility function is as follows

U(B, M) = 2B + M